Marginal cost can be defined as the change in
A. cost resulting from one less unit of production.
B. benefit resulting from one more unit of production.
C. benefit resulting from one less unit of production.
D. cost resulting from one more unit of production.
Answer: D
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In drilling a new oil well in an existing oil field, the fact that output on existing wells is reduced means that:
a. existing wells have negatively sloped MC curves. b. existing wells and new wells are owned by different people. c. existing wells and new wells are owned by the same people. d. there is a discrepancy between private and social marginal costs.
The interest-rate effect
a. depends on the idea that increases in interest rates increase the quantity of money demanded. b. depends on the idea that increases in interest rates increase the quantity of money supplied. c. is the most important reason, in the case of the United States, for the downward slope of the aggregate-demand curve. d. is the least important reason, in the case of the United States, for the downward slope of the aggregate-demand curve.
Long-run economic growth requires all of the following except
A) government provision of secure property rights. B) political instability. C) technological change. D) increases in capital per hour worked.
A proposed steel mill will be powered by coal. The country has one company that mines a limited amount of inferior coal, which may not be suitable. In evaluating the potential profit of this mill, how should we determine the price of coal?
What will be an ideal response?